Seoul - Good afternoon. Thank you for joining us.
In just a few days, Seoul will become the world’s capital city of aviation with the opening of the 75th IATA Annual General Meeting & World Air Transport Summit.
This is the first time the AGM will come to the Republic of Korea and we are being hosted by Korean Air.
Korea is a powerhouse of aviation—with a strong airport hub and a vibrant industry. IATA has 6 member airlines here.
The mood of the industry
The AGM is a great time to take the temperature of the industry and understand its state of health.
Financially, we expect 2019 be a 10th consecutive annual profit.
And we’ve rewarded shareholders with a return on invested capital above the weighted cost of capital in each of the previous four years.
But we are seeing some headwinds. These last six months have been tough for airlines.
Global trade has weakened, trade wars are intensifying and fuel prices have risen significantly.
We have geopolitical tensions leading to airspace closures in key regions.
The good news is that passenger demand is holding up. Today are announcing 4.3% year-on-year passenger growth in April. The strongest markets are Europe (+7.6%), Latin America (+5.7%) and North America (+4.4%).
The not so good news is that air cargo is suffering. Compared to April last year, air freight markets are seeing a 4.7% decline. The weakest market are Asia Pacific (-7.4%), Europe (-6.2%) and Middle East (-6.2%). It is clear that trade tensions are taking their toll on the cargo industry.
We will present our updated economic outlook with more information on what we think these developments mean for airlines at the AGM on Sunday.
The AGM
These challenges form the backdrop for our 75th AGM.
What will we discuss?
As an industry, we are focused on preparing for a doubling of demand for air connectivity over the next 20 years.
To accommodate that demand,
- We must be safe, secure & sustainable
- We must have adequate, affordable infrastructure, developed with user input
- We must attract and train a skilled workforce
- And we must continue to demonstrate to governments the value of aviation
So, all of these have an important place on the Agenda.
This is a very big year for sustainability. Since January, airlines have been tracking their carbon emissions, in preparation for the 2020 introduction of CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation.
With the 40th International Civil Aviation Organization (ICAO) Assembly taking place later this year, we will have the opportunity to remind governments of the importance of meeting their CORSIA commitments.
As an industry, we also have a job to do when it comes to increasing diversity in our workforce. That means attracting more women to this industry and promoting those who are in it to positions of leadership.
We have launched the Diversity and Inclusion Awards to recognize those companies and individuals who are leading in this effort and we will celebrate our first honorees at the AGM.
I don’t want to give away the entire program, so I’ll stop here with one final thought:
I call aviation the Business of Freedom because it liberates people from the bounds of distance and geography. We reunite families and loved ones over vast distances, we provide businesses with the ability to sell their goods in global markets. Aviation gives us the freedom to connect and build communities in ways that were not possible at any other time in human history.
And over the next two decades, we will bring the business of freedom to more than 4 billion more travelers.
You can listen to the press conference below: